NEWS

Over the past few weeks I have written about the various business pathways in Canada including Quebec's business categories and the opportunities to obtain a work permit to operate their own business in Canada. In addition to these methods, most provinces across Canada also have specific programs to attract entrepreneurs.Canada is facing a critical challenge. Due to its aging population it is projected that 75% of all small business owners will retire in the next 5-10 years. Add to this the fact that many provinces across Canada are facing negative population growth and it becomes clear why these provinces are taking important steps to attract and retain new immigrants, particularly those who will set up or buy existing businesses in the province.

This presents a unique opportunity for those who are interested in immigrating to Canada and would like to engage in a business activity that will lead to permanent residence. Each province has different programs based on their local needs however most of the provincial nominee programs for entrepreneurs incorporate the following three steps:

1- eligibility requirements: if you meet the minimum eligibility requirements and score required for each province you will be able to submit an initial application to be considered by the province. Your score will be assessed on factors such as age, education, work experience, management experience, business ownership experience, net assets and any connections you have to the province. However, even if you meet the minimum score, provinces will choose the highest overall scores from among all applications that they receive.

2- settlement in the province: once you are selected to proceed with your provincial application based on your high score, the province will support your application for a work permit to come to Canada in order to buy or set up your business in the province. The minimum investment that you must make will vary depending on your destination. Currently the lowest amount of investment required in your active business is at least $150,000. When you have settled in the province, made your active investment and managed it as an active business for at least one year, the province can nominate you to receive permanent residence.

3- application for permanent residence: after having completed step 2 and making your active business investment in the province you can finally submit your application to receive permanent residence in Canada. As with all other applications for permanent residence you will have to undergo medical and security checks. Once your application is approved you and your eligible family members will obtain permanent residence in Canada.

The provinces' goal in setting up their programs is to attract and retain immigrants. Therefore it is important to note that a province may withdraw its support for your permanent residence application if it finds out that you do not intend to reside in the province after you obtain your permanent residence.

The best advice I have for applicants who are interested in applying to a provincial nominee program is that they should do a lot of research before they finalize their decision. While I may be able to explain the differences between the various programs, ultimately you and your family will have to live and work in your chosen province. In order to help make your decision you should try to make an exploratory trip to the province as well as search business and living conditions online. The time you spend researching and developing your plans will not only help you to make the best decision but will also increase your prospects of success in reaching your goal of setting up a business and new life in Canada.

An entrepreneur is a person who organizes and operates a business, taking on financial risks in the hope of profit. Entrepreneurs are an important part the fabric of Canada's economy, creating and growing businesses that, at the very least, provide us with products and services and create employment.

Until 2014, Canada had a federal “Entrepreneur” immigration program that granted permanent residence to applicants on the condition that after immigrating they would buy or set up a business in Canada. There were great benefits from the businesses created under the program but monitoring the businesses was very difficult and it often took up to 5 or 6 years for applications to be approved.

However, the demand for those wanting to buy or set up a business in Canada has not changed since the program was cancelled. I am approached regularly by applicants, often business owners and managers, who want to relocate their business or buy a business in Canada because of the market opportunities they have identified in Canada. The good news is that there are visa and immigration options available for those interested in buying or setting up a business in Canada.

Under certain conditions you may qualify to obtain a work permit to buy or set up a business in Canada. The first step is that you must find an acceptable, active business opportunity. There is no list of “acceptable” businesses but the business should be a genuine business, it should be financially viable and it should be logical that given your experience and training you will be able to manage the business when you obtain your work permit. The minimum investment required for the business will be determined on a case by case basis depending on factors such as the type of business you are acquiring, the investment required to achieve the business goals, and where the business is located.

As with any other business transaction you will need a team of experts to assist you in your purchase of the business including a business lawyer to negotiate and finalize the business purchase agreements, you may require a real estate lawyer if there is a property that is part of the business, and you should also have an accountant to review the financial documents of the business and advise with regards to tax planning and related matters.

After you have the business in place and the necessary approvals, the final and critical step is to obtain a work visa to work for your own business. While you may own shares of a business in Canada without a work permit or being a permanent resident, you cannot work for the company until you have a work visa. The application for your work visa is extremely important as the officer will carefully review your application to determine if you will be able to manage the business in Canada. Further, since a work visa is a temporary visa, the officer will look at important factors such as your ties to your home country and your financial ability to pay for your investment in determining whether you will receive a work visa.

Once you receive your work visa you will be able to work in Canada for your own business, managing its day-to-day operations. It is important to note that a work visa is temporary (even though there are options to renew it) and if you are interested in applying for permanent residence later you should make clear plans from the beginning of the process to ensure that the path you choose will be suitable. The requirements for a work visa are different from those required to qualify for immigration. You should seek advice from an experienced immigration lawyer to determine your eligibility for both immigration (based on factors such as your age, education, language ability) as well as a work visa.

Quebec is the second-most populous province in Canada and with its predominantly French-speaking population it has a unique relationship with the federal government. Therefore Quebec was able to negotiate the Quebec-Canada Accord, signed in 1991, that gives Quebec the power to select the immigrants to settle in the province. Quebec has used this power to design its own immigration programs and currently has some of the most robust business immigration programs in Canada.

Below is the summary of the latest details about the three main business immigration programs in the province of Quebec. It should be noted that since Quebec is a predominately French the province has greater opportunities for French speaking applicants that wish to settle in Quebec.

Quebec Immigrant Investor Program​Canada does not have any immigrant investment program where buying a property will grant you permanent residence or citizenship. However, Quebec's Immigrant Investor Program (“QIIP”) is the last standing program that allows investors that want to settle in Quebec to obtain permanent residence by making a direct investment with the government of Quebec.

To qualify under the QIIP, applicants must:

Show they have legitimately acquired a personal net-worth of at least $2,000,000

Have at least two years of senior managerial experience within the past five years

Commit to making an interest free investment $1,200,000 in a prescribed government-guaranteed investment for a period of five years (or finance this amount using an approved Canadian bank)

Show an intention to settle in the province of Quebec.

The QIIP has a quota for each intake period. For the current intake period that started on 10 September 2018 the quota is 1,900 applicants. The QIIP has been extremely popular with Chinese applicants therefore a maximum of 1235 Chinese nationals may submit applications (representing 65% of the quota) and applications from other countries will make up the remainder of the quota. This quota does not apply to French-speaking applicant who can apply irrespective of the quota.

There are a lot of misconceptions surrounding business immigration and particularly programs such as the QIIP. Unlike some other countries that have Citizenship investor programs, the QIIP only leads to permanent residence for applicants that are successful. Catchy article headlines often incorrectly raise concerns that that applicants under the investor program “buy” Canadian citizenship. This is incorrect, particularly given the complex and meticulous process that applicants have to go through to be approved and the level of documentation required from investor applicants to demonstrate their management experience and the legal accumulation of their assets. Just ask any applicant about the binders, and sometimes boxes, of documents they have provided in support of their application. Most importantly applicants under the investor program receive permanent residence and do not have a shortcut to Canadian citizenship and must adhere to the same residency obligations as all other immigrants and meet the eligibility requirements to become Canadian citizens.

Entrepreneur ProgramThis program is for applicants that want to use their entrepreneurial experience to set up or manage a business in Quebec. To qualify under Quebec's entrepreneur program applicants must:

Show they have legitimately acquired a personal net-worth of at least CA$300,000

Have at least two years of full-time management experience within the past five years in a business and must own at least 25% of the shares of the business

Commit to either create or acquire a business in Quebec for at least $100,000 representing at least 25% of the business and manage the business on a day-to-day basis

Quota for this program is currently at 60 applicants

In considering your application, in addition to assessing the business you will be managing, other factors such as your age, education, language skills and knowledge of Quebec will be considered.

Self-Employed ProgramThis program is for those who are self-employed, often on a smaller scale than an entrepreneur, and wish to continue similar work in Quebec. This is different from the Federal Self-Employed program that is geared towards athletes and those engaged in cultural activities. To qualify under Quebec's self-employed program applicants must:

Show they have legitimately acquired a personal net-worth of at least CA$100,000

Have at least two years of full-time experience within the past five years in a practice or profession outside of Canada that they want to continue in Quebec

Come to Quebec to create their own job (become self-employed) by practicing a profession or business activity

Make a start-up deposit at a financial institution in Quebec ($25,000 or $50,000 depending on the region you will settle in)

Quota for this program is currently at 50 applicants

In considering your application, in addition to assessing your experience and the proposal that you have for your work in Quebec, other factors such as your age, education, language skills and knowledge of Quebec will be considered. The start-up deposit will be returned to you if and when you create the job you outlined in your application.

While all three of these programs can lead to permanent residence, the entrepreneur program is different because there will be a condition on your permanent residence: under this program there will be a condition that you must set up the business you committed to within the first three years of becoming a permanent resident of Canada. And irrespective of the path you take to permanent residence you will face the same laws and regulations with regards to your residency obligation (maintaining your permanent residence) and applying to become a Canadian citizen.

These are the latest regulations with regards to Quebec's three business programs and reflect changes announced this past summer. Given the limited quotas under each stream I predict that the processing of these applications will be fairly quick, but this also means that you should act fast. If you are interested in one of these programs speak with a specialized immigration lawyer as soon as possible to determine your eligibility.

As a country built on immigration, Canada has been attracting entrepreneurs and investors from the start of its immigration story. Many of those initial entrepreneurs helped shape the early history of the country that we know today. In more modern times, Canada has adopted various business immigration programs since 1978 to attract entrepreneurs and investors and these programs have evolved over the past four decades.

The needs of entrepreneurs and investors are often different from those of other immigrants and these present a set of unique challenges for Canada's politicians and policymakers. Canada wants to select applicants who have a proven track record of success but is past performance the most important determinant of future success? Can a successful entrepreneur or investor that has spent a decade (or several decades) working outside of Canada replicate the same success in Canada? Setting up a new business in a new country can be a difficult task. You need access to local knowledge and networks, not to mention the local language. And will a successful entrepreneur want to stay in Canada and give up all that he or she has built outside of Canada.

The challenge for Canada's immigration system is to find the right balance between attracting successful entrepreneurs and making sure that the applicants that apply can and will stay in Canada to bring their knowledge, expertise and resources to Canada. And this is a serious challenge as demonstrated by the recent history of business immigration to Canada. Canada closed its long standing federal entrepreneur immigration program and investor immigration in 2014. The two programs that have since been introduced by the federal government (the Immigrant Investor Venture Capital Pilot Program and the Start Up Program) have received only a couple of hundred applications in the past five years.

At the provincial level, with the exception of the province of Quebec that still has an immigrant investor program, applicants can only apply under entrepreneur programs. As the population of many provinces continue to decline, there is a heightened need for provinces to retain newcomers. Therefore these entrepreneur programs have evolved into a two-step process where applicants must first spend time in the province (at least 1-2 years) and demonstrate that they can be successful entrepreneurs (set up and manage their own business with a minimum investment of $150,000 to $200,000) in Canada before they are able to apply for permanent residence. This new approach helps alleviate some of the concerns about the ability to choose applicants who will be able to replicate their success in Canada and remain in Canada.

So what are the options available to entrepreneurs and investors looking to relocate to Canada? Next week I will begin to review the current programs available, their eligibility requirements and how you can best prepare yourself to become a successful entrepreneur.

Note: This information is not intended as legal advice or opinion. You should always seek specialized legal advice with regards to your situation as the facts of each case are unique and the application of law varies in every case.